Lesser Tax
6 min read
Quick answer: Before your bank wires property-sale money from your NRO account to the US, it needs two tax forms. From April 1, 2026 they are Form 145 (the old Form 15CA), a declaration you file online on the income tax portal, and Form 146 (the old Form 15CB), a certificate from a Chartered Accountant confirming the right Indian tax was paid. For a sale, the usual route is: the buyer deducts TDS, your CA issues Form 146, you file Form 145 Part C, and the bank sends up to USD 1 million per financial year from your NRO account.
Key takeaways
- Rule 220 of the Income-tax Rules, 2026 replaced Rule 37BB. Form 145 replaced Form 15CA and Form 146 replaced Form 15CB for remittances on or after April 1, 2026. Many banks still say "15CA and 15CB".
- Form 145 still has four parts. Property-sale proceeds are taxable in India and almost always above Rs 5 lakh, so Part C with a Form 146 is the standard route.
- If the tax officer gave you a lower or nil deduction certificate under Section 395, you file Part B instead and no Form 146 is needed for that remittance.
- RBI lets NRIs send up to USD 1 million per financial year (April to March) out of NRO balances, including sale proceeds. The limit is per person and covers all NRO remittances in that year.
- Not filing the form, or filing it with wrong information, can cost a penalty of up to Rs 1 lakh.
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Why two forms are needed
India taxes the gain on Indian property no matter where the seller lives, so before money leaves the country it wants proof the tax was dealt with. The buyer deducts TDS when paying you (see TDS when an NRI sells property in India). Then, when you send the money abroad, the remittance has to be reported on Form 145, backed where required by a CA's Form 146.
Separately, your bank is an authorised dealer under India's foreign exchange law (FEMA). It can release dollars only within RBI's limits and with its own paperwork, usually Form A2 and a declaration. The tax forms and the bank forms work together: the bank will not send the money until it has the Form 145 acknowledgement.
Which part of Form 145 applies?
| Part of Form 145 | When it applies |
|---|---|
| Part A | The remittance, or the total for the tax year, is Rs 5 lakh or less |
| Part B | Above Rs 5 lakh, and you hold a certificate or order from the tax officer under Section 395 |
| Part C | Above Rs 5 lakh, and a CA has issued Form 146 |
| Part D | The money is not taxable in India |
For a property sale, the amount is well above Rs 5 lakh and the gain is taxable in India, so you will almost always use Part C. The Rs 5 lakh is counted across the whole tax year, not per transfer, so two Rs 4 lakh transfers in the same year together cross it.
What does the CA certify in Form 146?
Your CA looks at the sale deed, the purchase deed, the TDS certificate and your capital gains computation, then certifies:
- the nature of the payment (proceeds from the sale of immovable property),
- the amount, in rupees and in the foreign currency,
- the tax position under Indian law and the India-US tax treaty, and
- that the tax due has been deducted or paid.
Form 146 is filed online by the CA. You then pull its acknowledgement number into your Form 145 Part C.
How the USD 1 million NRO limit works
RBI allows balances in an NRO account to be sent abroad up to USD 1 million per financial year, after applicable taxes. Three points people get wrong:
- It is per person per financial year, not per sale. If two flats sold in the same year net USD 1.4 million, only USD 1 million can go out that year. The rest waits until April or needs RBI approval.
- Rent, interest and dividends you sent from NRO earlier in the year count toward the same USD 1 million.
- NRE balances are freely repatriable and do not use up the NRO limit.
If you and your spouse co-own the flat, each of you has your own USD 1 million limit for your share, as long as the proceeds are credited to each owner's own NRO account.
Step by step: from sale to US account
Here is a worked example with rounded, illustrative figures. Priya, on an H-1B in Seattle, sells her Bengaluru flat in November 2026 for Rs 2.6 crore. The buyer deducts TDS and the net, about Rs 2.2 crore, is credited to her NRO account.
- Check the TDS. Priya confirms the buyer's TDS shows against her PAN in her annual tax statement, and collects the TDS certificate (Form 131 or Form 132, depending on how the buyer paid).
- Work out the gain. Her CA computes the long-term capital gain and the tax on it, and checks it against the TDS already deducted.
- Get Form 146. The CA issues Form 146 online for the amount she wants to send.
- File Form 145 Part C. Priya logs in to incometax.gov.in, fills Part C and enters the Form 146 acknowledgement number.
- Give the bank its papers. She submits Form A2, the bank's declaration, the sale deed, purchase proof, the TDS certificate and the Form 145 acknowledgement.
- The bank wires the money. At the day's exchange rate, about USD 250,000 reaches her US account, well inside her USD 1 million limit for the year.
If the buyer deducted more than her real tax, Priya claims the extra back in her India return for tax year 2026-27, due July 31, 2027 for most individuals.
What this means for your taxes
On the US side, the money arriving is a transfer between your own accounts and is not income. The sale itself is reported on your US return for the year of the sale (Schedule D), and the Indian tax on the gain can be claimed as a foreign tax credit on Form 1116. See reporting Indian income on your US tax return and Form 1116 for tax paid in India.
If your Indian account balances were above $10,000 at any point in the year, even for a day because the sale proceeds sat there, you also file an FBAR. See India accounts over $10,000 and the FBAR. If the property was a gift or inheritance from your parents, check Form 3520 for gifts and inheritance from India.
This is general information, not advice for your situation. Have a CA confirm the forms and limits for your remittance. Lesser Tax handles the US side and works with partner CAs in India: see how Lesser Tax works for NRIs.